Gabriel Felbermayr - Academia.edu (original) (raw)
Papers by Gabriel Felbermayr
Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to intern... more Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to international labor mobility. Controlling for institutional quality, trade, and nancial openness, we establish a robust and non-negative causal eect of immigration on real percapita income.
Trade economists traditionally study the effect of lower variable trade costs. While increasingly... more Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with heterogeneous firms, trade in differentiated goods, and variable external economies of scale to sort out the rich interactions
World trade evolves at two margins. Where a bilateral trading relationship already exists it may ... more World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post-World-War-II growth in manufacturing world trade along
Journal of Development Economics, 2014
ABSTRACT Growth theory predicts that natural disasters should, on impact, lower GDP per capita. H... more ABSTRACT Growth theory predicts that natural disasters should, on impact, lower GDP per capita. However, the empirical literature does not offer conclusive evidence. Most existing studies use disaster data drawn from damage records of insurance companies. We arguethat this may lead to estimation bias as damage data and the selection into the database may correlate with GDP. We build a comprehensive database of disaster events and their intensities from primary geophysical and meteorological information. In contrast to insurance data, our GeoMet data reveal a substantial negative and robust average impact effect of disasters on growth. The worst 5% disaster years come with a growth damage of at least 0.46 percentage points. That average effect is driven mainly by very large earthquakes and some meteorological disasters. Poor countries are more strongly affected by geophysical disasters; rich more by meteorological events. International openness and democratic institutions reduce the adverse effect of disasters.
Economics Letters, 2015
ABSTRACT This letter uses an augmented gravity model to revisit the effect of similarity in incom... more ABSTRACT This letter uses an augmented gravity model to revisit the effect of similarity in income distributions on bilateral trade flows. We document a robust new empirical regularity: while differences in average incomes between two countries increase trade, differences in income dispersion reduce it. Our result sheds new light on the Linder hypothesis and stresses the importance of demand-based theories of international trade.
In Deutschland werden den Unternehmen Exportkreditgarantien zur Verfügung gestellt, die auch als ... more In Deutschland werden den Unternehmen Exportkreditgarantien zur Verfügung gestellt, die auch als »Hermesdeckungen« bekannt sind. Im Rahmen einer aktuellen Studie hat das ifo Institut die Beschäftigungseffekte der Hermesdeckungen für die letzten zehn Jahre evaluiert. Die Analyse zeigte, dass Hermesdeckungen insbesondere für Exporte in Zielländer in Anspruch genommen werden, die sich neben hohem Wachstumspotenzial auch durch hohe Risiken auszeichnen. Die exportfördernde Wirkung von Hermesbürgschaften führt auch zu einer höheren Beschäftigung in Deutschland.
Abstract Many European,countries restrict immigration,from,new,EU member,countries. The rationale... more Abstract Many European,countries restrict immigration,from,new,EU member,countries. The rationale is to avoid adverse,wage,and employment,e¤ects. We quantify these e¤ects for Germany. Following Borjas (2003), we estimate a structural model of labor demand, based on elasticities of substitution between,workers with di¤erent experience levels and education. We allow for unemployment,which we model in a price-wage-setting framework. We simulate a counterfactual,scenario without,restrictions for migration,from new,EU members countries. We …nd moderate negative wage e¤ects, combined with increased unemployment,for some,types of workers. Uncoordinated,wage-setting aggravates wage cuts. 1,Introduction The treaties regulating the entry of 12 Central- and Eastern European countries (CEECs)
International Review of Economics & Finance
The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions... more The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions and endogenous labor market institutions. Countries are linked by trade in goods and non-cooperatively set unemployment benefits to maximize national welfare. We show that more open and smaller economies have more generous unemployment benefit replacement rates as a larger fraction of the costs is borne by foreign trading partners. These results are in line with empirical stylized facts. Additionally, we find that the optimal level of unemployment benefits is independent from the level of unemployment benefits abroad and that non-cooperatively set unemployment rates are inefficiently high.
Journal of International Economics
This paper characterizes analytically the optimal tariff of a large one-sector economy with monop... more This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros (JIE, 1987). The optimal tariff internalizes a markup distortion and a terms of trade externality. It is larger the higher the dispersion of firm-level productivities, and the bigger the country's relative size or relative average productivity. Furthermore, in the two-country Nash equilibrium, tariffs turn out to be strategic substitutes. Small or poor economies set lower Nash tariffs than large or rich ones. Lower transportation costs or smaller fixed market entry costs induce higher equilibrium tariffs and larger welfare losses relative to the case of zero tariffs. Similarly, cross-country productivity or size convergence increases the global welfare loss due to non-cooperative tariff p...
Journal of International Economics, 2015
ABSTRACT The quantitative trade literature often does not distinguish between tariffs and iceberg... more ABSTRACT The quantitative trade literature often does not distinguish between tariffs and iceberg trade costs. This paper explores qualitatively and quantitatively how this distinction matters for the gains from trade. Most obviously, tariffs generate government revenues, while icebergs do not. In models of monopolistic competition, they may also affect entry. Finally, depending on whether they are modeled as cost or demand shifters, tariffs may have different implications on profits, entry, and, in turn, on the elasticity of trade flows and welfare. We show that the welfare formula by Arkolakis, Costinot, and Rodriguez-Clare (2012) requires qualification, even in the simple single-sector case. We find that the quantitative welfare consequences of cost- versus demand-shifting tariffs can be important.
SSRN Electronic Journal, 2000
Handbook of the Economics of International Migration, 2015
ABSTRACT In this paper, we provide an overview of the relationship between international migratio... more ABSTRACT In this paper, we provide an overview of the relationship between international migration and international trade as well as capital movements. After taking a brief historical perspective, we first investigate migration flows between two countries in a static, neoclassical context. We allow for a disaggregated view of migration that distinguishes between different types of labor and emphasizes the distinction between migration flows and pre-existing stocks. We focus on different welfare channels, on internal income distribution, international income convergence and on whether migration and trade are substitutes or complements. Complementarity/substitutability hinges on whether countries share the same technology, and the pivotal question is whether or not technology is convex. Generally, under substitutability between trade and migration and with convex technology, globalization tends to lead to convergence. Moreover, under non-convex technology trade and migration tend to be complements. Turning to dynamic models with capital adjustment costs and capital mobility, the same is true for the relationship between migration and capital flows. Nevertheless, in neoclassical models, we may observe emigration at the same time as capital accumulates during the transition to a steady state. Moreover, we can explain reverse migration. We also touch upon the effects of migration on the accumulation of both knowledge and human capital, by invoking endogenous growth theory. Finally, we review the empirical literature exploring the link between migration and trade. The discussion is based on the so called gravity model of trade, in which trade between pairs of countries is related to measures of their respective sizes, preferences, and trade costs. We revisit the identification of the overall trade-creating effect of migration and its break-down into the trade channel and the preference channel. We clarify the role of product differentiation for the size of estimated effects, discuss the role of immigrants' education and occupation, and emphasize direct and indirect networks and their trade-enhancing potential.
World Scientific Studies in International Economics, 2014
Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), WTO... more Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), WTO membership does promote bilateral trade, at least for developed economies and if membership includes non-formal compliance. We review the literature in order to identify open issues. We then develop the simplest possible "corner-solutions" version of the gravity model which serves as a framework to readdress these issues. We focus on the extensive margin of trade that separates positive-trade from zero-trade country pairs. We argue that the model can be consistently estimated using Poisson pseudo-maximum-likelihood methods with exporter and importer fixed effects. We account for coding issues and the potential heterogeneity of the WTO membership which recent contributions have stressed. While we find that WTO membership increases the likelihood that a given country pair trades, we do not find that the extensive margin has a strong and systematic effect on the average trade-creating potential of the WTO.
Labor Mobility and the World Economy, 2006
Reflecting skill-based selection in immigration policies, we propose a variant of the Ricardo-Vin... more Reflecting skill-based selection in immigration policies, we propose a variant of the Ricardo-Viner featuring three levels skills. We analyze both, wage and welfare effects of alternative types of immigration scenarios. The model incorporates various adjustment mechanisms that may be responsible for why host country wage effects of immigration may in some cases be low, and large in others, as suggested by the empirical literature. A crucial thrust of the paper is to take into account the general equilibrium repercussions from an endogenous price adjustment for both tradable and nontradable goods. We identify conditions, under which goods price effects dominate the effects of factor complementarity, potentially leading to welfare losses. *
SSRN Electronic Journal, 2000
We argue that compensating losers is more difficult for immigration than for trade and capital mo... more We argue that compensating losers is more difficult for immigration than for trade and capital movements. While a tax-cum-subsidy mechanism allows the government to turn the gains from trade into a Pareto improvement, the same is not true for the so-called immigration surplus, if the redistributive mechanism is not allowed to discriminate against migrants. We discuss policy conclusions to be drawn from this fundamental asymmetry between migration and other forms of globalization.
... Department of Management, Technology, and Economics, ETH Zürich (Swiss Federal Institute of T... more ... Department of Management, Technology, and Economics, ETH Zürich (Swiss Federal Institute of Technology Zurich), CH-8092 Zürich, Switzerland, E-mail: mail@axel-dreher.de ... Ursprung, 2002; Bengoa and Sanches-Robles, 2003; Busse, 2004), thus giving rise to a ...
Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to intern... more Using a cross-section of countries, we adapt Frankel and Romer's (1999) IV strategy to international labor mobility. Controlling for institutional quality, trade, and nancial openness, we establish a robust and non-negative causal eect of immigration on real percapita income.
Trade economists traditionally study the effect of lower variable trade costs. While increasingly... more Trade economists traditionally study the effect of lower variable trade costs. While increasingly important politically, technical barriers to trade (TBTs) have received less attention. Viewing TBTs as fixed regulatory costs related to the entry into export markets, we use a model with heterogeneous firms, trade in differentiated goods, and variable external economies of scale to sort out the rich interactions
World trade evolves at two margins. Where a bilateral trading relationship already exists it may ... more World trade evolves at two margins. Where a bilateral trading relationship already exists it may increase through time (intensive margin). But trade may also increase if a trading bilateral relationship is newly established between countries that have not traded with each other in the past (extensive margin). We provide an empirical dissection of post-World-War-II growth in manufacturing world trade along
Journal of Development Economics, 2014
ABSTRACT Growth theory predicts that natural disasters should, on impact, lower GDP per capita. H... more ABSTRACT Growth theory predicts that natural disasters should, on impact, lower GDP per capita. However, the empirical literature does not offer conclusive evidence. Most existing studies use disaster data drawn from damage records of insurance companies. We arguethat this may lead to estimation bias as damage data and the selection into the database may correlate with GDP. We build a comprehensive database of disaster events and their intensities from primary geophysical and meteorological information. In contrast to insurance data, our GeoMet data reveal a substantial negative and robust average impact effect of disasters on growth. The worst 5% disaster years come with a growth damage of at least 0.46 percentage points. That average effect is driven mainly by very large earthquakes and some meteorological disasters. Poor countries are more strongly affected by geophysical disasters; rich more by meteorological events. International openness and democratic institutions reduce the adverse effect of disasters.
Economics Letters, 2015
ABSTRACT This letter uses an augmented gravity model to revisit the effect of similarity in incom... more ABSTRACT This letter uses an augmented gravity model to revisit the effect of similarity in income distributions on bilateral trade flows. We document a robust new empirical regularity: while differences in average incomes between two countries increase trade, differences in income dispersion reduce it. Our result sheds new light on the Linder hypothesis and stresses the importance of demand-based theories of international trade.
In Deutschland werden den Unternehmen Exportkreditgarantien zur Verfügung gestellt, die auch als ... more In Deutschland werden den Unternehmen Exportkreditgarantien zur Verfügung gestellt, die auch als »Hermesdeckungen« bekannt sind. Im Rahmen einer aktuellen Studie hat das ifo Institut die Beschäftigungseffekte der Hermesdeckungen für die letzten zehn Jahre evaluiert. Die Analyse zeigte, dass Hermesdeckungen insbesondere für Exporte in Zielländer in Anspruch genommen werden, die sich neben hohem Wachstumspotenzial auch durch hohe Risiken auszeichnen. Die exportfördernde Wirkung von Hermesbürgschaften führt auch zu einer höheren Beschäftigung in Deutschland.
Abstract Many European,countries restrict immigration,from,new,EU member,countries. The rationale... more Abstract Many European,countries restrict immigration,from,new,EU member,countries. The rationale is to avoid adverse,wage,and employment,e¤ects. We quantify these e¤ects for Germany. Following Borjas (2003), we estimate a structural model of labor demand, based on elasticities of substitution between,workers with di¤erent experience levels and education. We allow for unemployment,which we model in a price-wage-setting framework. We simulate a counterfactual,scenario without,restrictions for migration,from new,EU members countries. We …nd moderate negative wage e¤ects, combined with increased unemployment,for some,types of workers. Uncoordinated,wage-setting aggravates wage cuts. 1,Introduction The treaties regulating the entry of 12 Central- and Eastern European countries (CEECs)
International Review of Economics & Finance
The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions... more The paper sets up a two-country asymmetric trade model with heterogeneous firms, search frictions and endogenous labor market institutions. Countries are linked by trade in goods and non-cooperatively set unemployment benefits to maximize national welfare. We show that more open and smaller economies have more generous unemployment benefit replacement rates as a larger fraction of the costs is borne by foreign trading partners. These results are in line with empirical stylized facts. Additionally, we find that the optimal level of unemployment benefits is independent from the level of unemployment benefits abroad and that non-cooperatively set unemployment rates are inefficiently high.
Journal of International Economics
This paper characterizes analytically the optimal tariff of a large one-sector economy with monop... more This paper characterizes analytically the optimal tariff of a large one-sector economy with monopolistic competition and firm heterogeneity in general equilibrium, thereby extending the small-country results of Demidova and Rodriguez-Clare (JIE, 2009) and the homogeneous firms framework of Gros (JIE, 1987). The optimal tariff internalizes a markup distortion and a terms of trade externality. It is larger the higher the dispersion of firm-level productivities, and the bigger the country's relative size or relative average productivity. Furthermore, in the two-country Nash equilibrium, tariffs turn out to be strategic substitutes. Small or poor economies set lower Nash tariffs than large or rich ones. Lower transportation costs or smaller fixed market entry costs induce higher equilibrium tariffs and larger welfare losses relative to the case of zero tariffs. Similarly, cross-country productivity or size convergence increases the global welfare loss due to non-cooperative tariff p...
Journal of International Economics, 2015
ABSTRACT The quantitative trade literature often does not distinguish between tariffs and iceberg... more ABSTRACT The quantitative trade literature often does not distinguish between tariffs and iceberg trade costs. This paper explores qualitatively and quantitatively how this distinction matters for the gains from trade. Most obviously, tariffs generate government revenues, while icebergs do not. In models of monopolistic competition, they may also affect entry. Finally, depending on whether they are modeled as cost or demand shifters, tariffs may have different implications on profits, entry, and, in turn, on the elasticity of trade flows and welfare. We show that the welfare formula by Arkolakis, Costinot, and Rodriguez-Clare (2012) requires qualification, even in the simple single-sector case. We find that the quantitative welfare consequences of cost- versus demand-shifting tariffs can be important.
SSRN Electronic Journal, 2000
Handbook of the Economics of International Migration, 2015
ABSTRACT In this paper, we provide an overview of the relationship between international migratio... more ABSTRACT In this paper, we provide an overview of the relationship between international migration and international trade as well as capital movements. After taking a brief historical perspective, we first investigate migration flows between two countries in a static, neoclassical context. We allow for a disaggregated view of migration that distinguishes between different types of labor and emphasizes the distinction between migration flows and pre-existing stocks. We focus on different welfare channels, on internal income distribution, international income convergence and on whether migration and trade are substitutes or complements. Complementarity/substitutability hinges on whether countries share the same technology, and the pivotal question is whether or not technology is convex. Generally, under substitutability between trade and migration and with convex technology, globalization tends to lead to convergence. Moreover, under non-convex technology trade and migration tend to be complements. Turning to dynamic models with capital adjustment costs and capital mobility, the same is true for the relationship between migration and capital flows. Nevertheless, in neoclassical models, we may observe emigration at the same time as capital accumulates during the transition to a steady state. Moreover, we can explain reverse migration. We also touch upon the effects of migration on the accumulation of both knowledge and human capital, by invoking endogenous growth theory. Finally, we review the empirical literature exploring the link between migration and trade. The discussion is based on the so called gravity model of trade, in which trade between pairs of countries is related to measures of their respective sizes, preferences, and trade costs. We revisit the identification of the overall trade-creating effect of migration and its break-down into the trade channel and the preference channel. We clarify the role of product differentiation for the size of estimated effects, discuss the role of immigrants' education and occupation, and emphasize direct and indirect networks and their trade-enhancing potential.
World Scientific Studies in International Economics, 2014
Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), WTO... more Recent literature has argued that, contrary to the results of a seminal paper by Rose (2004), WTO membership does promote bilateral trade, at least for developed economies and if membership includes non-formal compliance. We review the literature in order to identify open issues. We then develop the simplest possible "corner-solutions" version of the gravity model which serves as a framework to readdress these issues. We focus on the extensive margin of trade that separates positive-trade from zero-trade country pairs. We argue that the model can be consistently estimated using Poisson pseudo-maximum-likelihood methods with exporter and importer fixed effects. We account for coding issues and the potential heterogeneity of the WTO membership which recent contributions have stressed. While we find that WTO membership increases the likelihood that a given country pair trades, we do not find that the extensive margin has a strong and systematic effect on the average trade-creating potential of the WTO.
Labor Mobility and the World Economy, 2006
Reflecting skill-based selection in immigration policies, we propose a variant of the Ricardo-Vin... more Reflecting skill-based selection in immigration policies, we propose a variant of the Ricardo-Viner featuring three levels skills. We analyze both, wage and welfare effects of alternative types of immigration scenarios. The model incorporates various adjustment mechanisms that may be responsible for why host country wage effects of immigration may in some cases be low, and large in others, as suggested by the empirical literature. A crucial thrust of the paper is to take into account the general equilibrium repercussions from an endogenous price adjustment for both tradable and nontradable goods. We identify conditions, under which goods price effects dominate the effects of factor complementarity, potentially leading to welfare losses. *
SSRN Electronic Journal, 2000
We argue that compensating losers is more difficult for immigration than for trade and capital mo... more We argue that compensating losers is more difficult for immigration than for trade and capital movements. While a tax-cum-subsidy mechanism allows the government to turn the gains from trade into a Pareto improvement, the same is not true for the so-called immigration surplus, if the redistributive mechanism is not allowed to discriminate against migrants. We discuss policy conclusions to be drawn from this fundamental asymmetry between migration and other forms of globalization.
... Department of Management, Technology, and Economics, ETH Zürich (Swiss Federal Institute of T... more ... Department of Management, Technology, and Economics, ETH Zürich (Swiss Federal Institute of Technology Zurich), CH-8092 Zürich, Switzerland, E-mail: mail@axel-dreher.de ... Ursprung, 2002; Bengoa and Sanches-Robles, 2003; Busse, 2004), thus giving rise to a ...